Nigeria Starts Drilling for Oil & Gas in Country’s North for First Time

The commercial discovery of crude oil, gas, and condensate in the Kolmani area of northeastern Nigeria was first announced by the NNPC Ltd in 2019. According to Nigerian president Muhammadu Buhari, Kolmani accounts for 1 billion barrels of oil and 500 billion cubic feet of gas reserves.

NNPC, a state-owed Nigerian company, has begun drilling for oil and gas wells in the north of the country. This is the first time it has drilled outside the southern Niger Delta, which is rich in fossil fuels.

According to a presidential statement, the project, which has received $3 billion in investment, aims to build an oil refinery, a gas processing unit, a power plant, and a fertilizer factory in addition to drilling.

Speaking at the Kolmani oilfield flag-off ceremony, Buhari stressed the importance of the project in increasing the well-being of the country's population.

“As a fully integrated in-situ development project comprising upstream production, oil refining, power generation and fertilizer, the project promises many benefits for the nation. This includes but is not limited to energy security, financial security, food security as well as overall socio-economic development for the country,” he said.

NNPC’s Group Chief Executive Officer, Mallam Mele Kyari, also speaking at the ceremony assured that the construction of a refinery, fertilizer plant, power plant, and associated oil and gas processing facilities would increase Nigeria's energy security while also creating thousands of jobs and opportunities that would generate revenue for the federation.

Despite the fact that Nigeria is rich in fossil fuels, the country's energy system is incapable of meeting the ever-increasing demands placed on it, according to observers. Nigeria's existing power plants are unable to supply electricity to the country's 225 million people, forcing many citizens to rely on diesel generators.

In particular, Nigeria's power grid has experienced more than 200 partial and total failures over the last twelve years, according to the Nigerian Electricity Regulatory Commission (NERC).

CEIC Data analysis demonstrated that Nigeria's oil output has been steadily declining since 2020, with output falling below 1.2 million barrels per day in August. Crude oil theft and pipeline vandalism have been blamed for the decline, and the country's government spent more than $28 million in 2022 trying to protect its pipelines. According to Nigeria's official oil firm, oil theft, which reduced the country's oil production by more than 400,000 barrels per day, has also pushed Nigeria from Africa's top exporter to number two.

According to local media reports, power outages occurred in the country in September, July, and June of this year, as well as twice in March and twice in April. Gas shortages along with water management issues, gas pipeline vandalism, and a general system imbalance were among the primary causes of recent breakdowns, according to Nigerian authorities.